President Trump travelled last week to see damage from the North Carolina floods and Los Angeles wildfires. He suggested that the Federal Emergency Management Agency (FEMA) be reformed or terminated, and he signed an executive order creating a new council to review the agency.

Trump suggested "maybe getting rid of FEMA," and he said, "I think we’re going to recommend that FEMA go away and we pay directly." The president’s inclinations are right, as I discuss in this study, but we should phase out FEMA and federal payments to the states for disasters.

The American system of disaster response is not supposed to be a top-down structure imposed by Washington. Rather, the system is based on federalism, private charitable efforts, and mutual aid between states, cities, and utilities. Unfortunately, growing federal intervention is undermining this efficient, decentralized structure.

Here are 10 reasons why FEMA is not needed and sometimes detrimental.

1. Budget deficits. The federal government must cut spending to deal with massive budget deficits. Congress should repeal funding of activities that the states can fund themselves, including disaster response and reconstruction.
2. Federalism. The Congressional Research Service noted, "The United States takes a ‘bottom up’ approach to both managing and providing assistance, during and following a disaster." State and local governments employ more than one million personnel in police, fire, and other first responder activities. State governors have wide-ranging responsibilities and powers during disasters, such as being able to order evacuations.
3. Role Not Unique. A bipartisan congressional report after Hurricane Katrina in 2006 noted that "many Americans ... falsely viewed FEMA as some sort of national fire and rescue team," but "FEMA is not a first responder agency." Instead, FEMA’s main role is handing out aid, but states should cover disaster costs with their own rainy day funds.
4. Bad Incentives. Growing FEMA bailouts create a disincentive for states, businesses, and individuals to prepare for disasters. The states demand federal aid, and federal politicians put the costs on the national credit card. Growing federal intervention displaces more efficient state, local, and private efforts.
5. Infrastructure. The vast majority of the nation’s infrastructure is owned by state and local governments and the private sector, not by the federal government. It is the responsibility of infrastructure owners to know the risks, to fortify facilities, and to seek insurance coverage.
6. Top-down regulations. With federal funding of disaster response and rebuilding comes top-down regulations that encumber state and private efforts. FEMA’s bureaucratic barriers to private efforts during and after disasters are notorious, as with Hurricane Katrina in 2005.
7. Private-Sector Response. In US history, disasters have generated huge outpourings of aid from individuals, businesses, churches, and charitable groups. The American Red Cross, for example, provides food, water, and temporary shelter after disasters. After recent flooding in North Carolina, Elon Musk sent more than 10,000 Starlink terminals, Walmart and Home Depot delivered food and supplies, and Taylor Swift donated 5ドル million.
8. Resource Sharing. A key feature of US disaster response is resource sharing between states, cities, utilities, and other groups. Standing agreements allow governments and utilities to rush teams and equipment to their neighbors hit by hurricanes, fires, and other disasters. Firefighting teams and equipment have poured into Los Angeles from dozens of states and Canada. Within a day or two of Helene hitting North Carolina, utility crews were arriving from up and down the East Coast.
9. Interstate Fairness. Each state has pros and cons that individuals and businesses trade off when considering where to locate. Florida and California have warmer climates than Michigan but higher risks of natural disasters. It is not fair for low-risk states to be continually paying through taxes for disasters in high-risk states, especially when the latter have not sufficiently prepared.
10. Crucial Federal Roles. While FEMA mainly hands out aid, other federal agencies hold critical skills and resources for disaster response. The Coast Guard’s search and rescue operations are vital during hurricanes. The National Guard under state command plays many crucial roles after disasters, such as medical care, law enforcement, and debris removal. The US Army supplied assets to aid the Helene and Milton efforts, and the Air Force flew search and rescue missions.

Congress should phase out FEMA aid for disaster preparedness, response, and relief. FEMA does perform some unique roles—such as flood mapping—and these can be moved to other agencies. Some FEMA activities, such as flood insurance, should be privatized.

In the wake of Katrina, Florida Governor Jeb Bush warned against strengthening federal powers at the expense of the states: "As the governor of a state that has been hit by seven hurricanes and two tropical storms in the past 13 months, I can say with certainty that federalizing emergency response to catastrophic events would be a disaster as bad as Hurricane Katrina."

As such, the federal government should only fill roles where it can add value not provided by the states or private sector. In disasters, Bush noted, "If you federalize, all the innovation, creativity, and knowledge at the local level would subside." That is true in many areas of state, local, and private activity.

This study elaborates on these ideas.

In the Wall Street Journal, Peggy Noonan reviews Carol Leonnig’s book, Zero Fail, about the history and performance of the Secret Service. The federal agency has suffered from epic failures and scandals in recent years.

Secret Service management has been dreadful and burying the agency within the sprawling new Department of Homeland Security in 2002 probably made things worse, as Noonan suggests. Indeed, I think that the DHS superstructure should be abolished as an excessive layer of counterproductive bureaucracy.

Where Noonan and Leonnig appear to go wrong is assuming that the Secret Service budget has been shortchanged.

• Noonan says—based on Leonnig’s findings—that the agency has been "weakened by bad leadership, underfunding, an insular culture and declining professionalism."
• Noonan claims that the agency "was always underfunded."
• Noonan recounts: "In 2011 Julia Pierson, who would become the first female director, told the Office of Management and Budget her agency was ‘bankrupt.’ Budget cuts led to understaffing and waves of uniformed-officer resignations."

The statements about "underfunding" and "budget cuts" could have used some factchecking. Secret Service spending and employment have soared since 1990. Spending did flatline for a while in real terms a decade ago, but that was after a large increase in the prior decade.

The chart below shows the agency’s spending in 2021 constant dollars. Real Secret Service spending increased from 0ドル.75 billion in 1990, to an estimated 3ドル.26 billion in 2021.

Secret Service civilian employment increased from 5,760 in 2002 to 7,669 in 2019, which is a 33 percent jump. This recent article suggests that the Secret Service is continuing to ramp up its employee count.

Finally, note that the agency failures Noonan highlights have nothing to do with funding levels anyway. For example, wild partying by Secret Service agents caused a major scandal on a 2012 presidential trip to Columbia. And in 2014, Omar Gonzalez took 29 seconds to make "his way from a public sidewalk to inside the White House. He had gotten directly past eight trained security professionals on a compound staffed with 154 men and women."

The 2021 figure is the estimate from the new federal budget released in May 2021.

Update: This post has been updated to include the most recent spending figures.

Government policies encourage Americans to live in risky places on seacoasts and along flood-prone rivers. Disasters happen, governments bail people out, they rebuild in the same places, bad incentives stay in place, further disasters strike and more dollars and lives are lost.

The Washington Post reported on recent flooding along the Mississippi River, which I’ve excerpted below.

But first, here are some general points about flooding and governments:

• Man-made vs Natural. Damage blamed on climate change and natural disasters is often caused by big government policies. Talking about Mississippi flooding, an expert in the Post story says, "The major cause of record, recent flooding is entirely man-made." That is also true of a lot of seacoast damage from hurricanes.
• Local Support for Development. "Environmentalists charge that jurisdictions hungry for tax revenue are continuing to plan risky projects without taking floods’ worsening intensity into account, heedless of the economic and human consequences," notes the Post.
• Federal Support for Development. Subsidies for flood insurance, flood control structures, beach replenishment, disaster rebuilding, and farming have encouraged development in flood-prone areas, as I discuss here. Since 1970, the number of Americans living in Special Flood Hazard Areas has increased from 10 million to more than 16 million.
• Levee Building. Government levee building along the Mississippi has reduced escape routes for the river along its course, increasing the power of the flow so that when it does break out it creates a widespread disaster. Governments have known about this problem for at least a century and a half.
• The Mississippi. Levees along the Mississippi cause the river’s thick sediment to surge with force into the Gulf rather than being deposited along the river building up the land. This fascinating 1987 essay in the New Yorker describes the Mississippi’s dynamics. At the same time, Army Corps structures around New Orleans have damaged protective wetlands.
• Global Problem. Anti-market policies by governments around the world have exacerbated flooding and disasters.

These points are developed further here, here, here, here, here, here, and here.

Here is what the Washington Post reported:

The city [St. Charles, MO] of about 70,000 has long grappled with flooding from the Missouri and Mississippi rivers, as well as rising water from creeks and streams — making it one of the most flood-prone regions in the state, with some 18ドル million in flood insurance claims paid out since 1970 by the Federal Emergency Management Agency.

Yet that hasn’t stopped the city from planning a 1ドル.5 billion riverfront development along the Missouri’s banks, 120 acres of upscale shops, restaurants and apartments mostly in the river’s flood plain, an area that has been partly submerged this summer.

Several hundred miles to the south, Louisiana is experiencing the fallout from decisions like that one — decades of rampant development behind tall levees that have cut the Mississippi and its many tributaries off from the vast open floodplains the rivers once carved for themselves.

Tropical Storm Barry, which made landfall Saturday as a hurricane, is predicted to travel up the Mississippi toward St. Louis, deluging surrounding areas as it goes, with rainfall that will be channeled back toward the Louisiana coast in days to come — the latest potential catastrophe.

"The major cause of record, recent flooding is entirely man-made — the dramatic constriction of our large rivers by oversized levees, flood plain development and structural narrowing for barge traffic," said Robert Criss, professor emeritus with the Department of Earth and Planetary Sciences at Washington University in St. Louis.

This year’s historic floods throughout the Midwest caused billions of dollars in damages; washed out highways, bridges and dozens of levees; swamped crop lands and cities; sent residents fleeing for their lives; and left a death toll in several states.

Decades of development have contributed to the problem. Claims to FEMA’s flood insurance program have increased rapidly in the past two decades and spread beyond coastal regions.

... Yet with millions of people living in flood plains and shipping and tourism economies built on these key waterways, there is little political will for change. Environmentalists charge that jurisdictions hungry for tax revenue are continuing to plan risky projects without taking floods’ worsening intensity into account, heedless of the economic and human consequences.

"It’s lunacy," said David Stokes, executive director of the Great Rivers Habitat Alliance. "They’re continuing to build in places where Mother Nature intended water to go. And there’s no end to it."

Despite rising federal deficits, Congress is set to pass another budget-busting spending bill. This time it is a 19ドル billion package of disaster-related subsidies.

The Washington Post reports "taxpayer spending on U.S. disaster fund explodes." It documents increases in disaster spending by the Federal Emergency Management Agency (FEMA). In a typical recent year, "spending on the federal disaster relief fund is almost 10 times higher than it was three decades ago, even after adjusting for inflation."

The story identifies two causes of the spending increases: climate change and population growth in disaster-prone areas. But it ignored perhaps the most important cause: increased federal intervention in the sorts of emergencies that used to be handled by the states, as I discuss here.

The Post is correct that more Americans are moving into disaster-prone areas:

Many more Americans have moved into harm’s way, with growth exploding in the Gulf Coast region and along the Continental Divide, where tornadoes frequently occur, according to a study on the "expanding bull’s eye effect" by Stephen M. Strader of Villanova University and Walker S. Ashley of Northern Illinois University.

Since 1970, 35 million more people and their homes have moved to coastal shoreline "in the direct path of potentially devastating storm surges," the researchers found, a 40 percent increase.

"We’ve put more stuff in the wrong place the wrong way," said W. Craig Fugate, a former FEMA administrator under President Barack Obama. "We’ve got a lot more stuff — bigger houses, multiple cars, more people — in high-hazard areas."

More people are also living in fire-prone areas of California.

The Post does not explore an important reason why Americans are moving into these areas: government subsidies. Federal subsidies for flood insurance, flood control structures, beach replenishment, and disaster rebuilding have encouraged development in coastal areas, as I discuss here. Meanwhile, state policies have contributed to building in California’s fire-prone areas.

American governments are not alone in pursuing policies that increase disaster hazards. A World Bank / United Nations study identified such policies in numerous countries and discussed market-based reforms to mitigate risks.

In the United States, federalism is supposed to undergird our system of handling disasters, particularly natural disasters. Under the 1988 Stafford Act, the federal government is supposed to get involved in disasters only if they are of "such severity and magnitude that effective response is beyond the capabilities of the state and the affected local governments."

However, presidents and congresses have increasingly ignored this limit. The number of presidential disaster declarations has soared and the costs of disaster bills have increased as politicians shoe-horn subsidies unrelated to immediate emergency response into bills.

Growing federal intervention is undermining the role of the states and private institutions in handling disasters. This intervention stems from politics not practical benefits. State and local governments and the private sector are better positioned to handle most disaster response. Also, states, cities, and private utilities aid each other during disasters.

Rising FEMA spending is not a good metric for measuring the severity of natural disasters striking the United States. Rather, it reflects growing populations living in risky areas and growing disregard for federalism in disaster-related response and rebuilding.

Social scientist Bent Flyvbjerg described the selection of government-funded infrastructure projects as "survival of the unfittest" because proponents of those projects systematically exaggerate the benefits and underestimate the costs. President Trump’s proposed border wall with Mexico provides a striking example of this: A wall along the border with Mexico will likely cost about 59ドル.8 billion to construct.

The Office of Management and Budget (OMB) recently sent a letter to Congress where it argued that 5ドル.7 billion would pay for approximately 234 miles of a new physical steel barrier along the border. That new estimate comes to about 24ドル.4 million per mile. This new OMB estimate is 41 percent more costly than the approximately 17ドル.3 million per mile construction costs that the Department of Homeland Security (DHS) estimated just a few years ago, 2.7 times as expensive as Mitch McConnell and Paul Ryan estimated, and 5 times as expensive as Trump’s lowest estimate.

Even worse, the 24ドル.4 million per mile estimate does not include the large cost overruns for government construction projects. Applying a conservative 50 percent cost overrun estimate to building the border fence brings the total price tag to approximately 36ドル.6 million per mile. Building a steel fence along the remaining 1,637 miles of Mexican border not covered by pedestrian fencing would cost approximately 59ドル.8 billion, excluding any maintenance costs.

There are a few caveats about the above estimate.

First, the 50 percent cost overrun estimate is conservative. A small sample of large construction projects selected by my colleague Chris Edwards shows that cost overruns boost total project costs by an average of 3.3 fold. The cost of the border fence is thus very likely to be more than double what I estimate above.

Second, this estimate is for the steel bollard barrier and not a concrete wall. In other words, the currently proposed steel border fence is far cheaper than the concrete and steel wall originally proposed by President Trump. Making it out of concrete could more than double the price.

Third, our cost estimate does not include the low-ball 864,353ドル annual per mile cost of maintaining the current border fence – which is likely a lot less expensive than repairing the barrier that has been proposed by Trump.

Fourth, the OMB’s cost estimate per wall is more in line with previous Trump administration requests than estimates made by organizations that are ideologically committed to building a wall regardless of the cost to taxpayers.

Since 2017, administration officials at the OMB have been relatively consistent in estimating that the government cost of building a border wall is around 24ドル million per mile. However, the incentives for and history of government agencies systematically underestimating the costs of government construction projects makes this the lowest possible estimate. If it is built for about 24ドル.3 million per mile than it would be the first time that a large government construction project has come in at or below cost in a very long time.

The cost of the border wall keeps getting higher, the border wall keeps becoming less of a wall, and the administration keeps promising that it will cover less and less of the border. At this rate, President Trump might end his administration with less fencing than he began it.

As Hurricane Florence spins toward the Carolina coast, the nation’s attention will be on the disaster readiness and response of governments and the affected communities. Have lessons been learned since the deeply flawed government response to Hurricane Katrina back in 2005?

I examined FEMA and the Katrina response in this study, discussing both the government failures and the impressive private-sector relief efforts.

Last year, Hurricane Maria devastated Puerto Rico, again exposing all sorts of government failures. Well-known chef José Andrés has a new book on the Maria response. He had an eye-opening experience on the island volunteering on relief efforts with his World Central Kitchen.

The Washington Post’s review of the book says that Andrés saw the flaws of top-down bureaucratic relief efforts and embraces more of a spontaneous order view of effective disaster relief:

With We Fed an Island, chef-and-restaurateur-turned-relief worker José Andrés doesn’t just tell the story about how he and a fleet of volunteers cooked millions of meals for the Americans left adrift on Puerto Rico after Hurricane Maria. He exposes what he views as an outdated top-down, para-military-type model of disaster relief that proved woefully ineffective on an island knocked flat by the Category 4 hurricane.

... ‘My original plan was to cook maybe ten thousand meals a day for five days, and then return home,’ Andrés writes. Instead, Andrés and the thousands of volunteers who composed Chefs for Puerto Rico remained for months, preparing and delivering more than 3 million meals to every part of the island. They didn’t wait for permission from FEMA.

... These grass-roots culinary efforts didn’t always sit well with administration officials or with executives at hidebound charities, in part because Andrés was no diplomat. He trolled Trump on Twitter over the situation on Puerto Rico. He badgered FEMA for large contracts to ramp up production to feed even more hungry citizens. He infamously told Time magazine that the "American government has failed" in Puerto Rico. A chef used to fast-moving kitchens, Andrés had zero patience for slow-footed bureaucracy, especially in a time of crisis.

... After dealing with so much red tape and mismanagement (remember the disastrous 156ドル million contract that FEMA awarded to a small, inexperienced company to prepare 30 million hot meals?), Andrés wants the government and nonprofit groups to rethink the way they handle food after a large-scale natural disaster. He wants them to drop the authoritarian, top-down style and embrace the chaos inherent in crisis. Work with available local resources, whether residents or idle restaurants and schools. Give people the authority and the means to help themselves. Stimulate the local economy.

‘What we did was embrace complexity every single second,’ Andrés writes. ‘Not planning, not meeting, just improvising. The old school wants you to plan, but we needed to feed the people.’

Andrés and World Central Kitchen have embraced complexity.

Hail to the chef!

The Stimson Center’s new study group report found that the federal government spent about 2ドル.8 trillion on counterterrorism (CT) activities since 9/11. The report seeks to account for all federal government spending on CT efforts divided into the four broad categories of defense emergency and overseas contingency operations, war-related state/​USAID, other foreign aid, and government-wide Homeland Security. The defense emergency and overseas contingency operations spending category accounts for about 1ドル.7 trillion or over 60 percent of the 2ドル.8 trillion spent. War-related state/​USAID and other foreign aid account for a relatively small 138ドル billion and 12ドル billion, respectively. Government-wide Homeland Security spending makes up the rest at 978ドル.5 billion since 9/11.

The big question the report does not attempt to answer is: Was all that spending worth it? Did that spending result in fewer people killed by terrorists on U.S. soil? One of the distinguished study group members is my Cato Institute colleague John Mueller who has spilled much ink trying to estimate the effectiveness of CT spending. Mueller provides some back of the envelope estimates to answer the question of whether this CT spending was worth it in his recent panel discussion on the Stimson Center’s report. After talking with Mueller, I decided to add some more analysis to show that an unreasonably large number of American lives would have to have been saved for the costs of CT spending to be justified.

For the costs of CT spending to equal the benefits in terms of the value of lives saved, it would have to have saved 188,740 lives, or 11,796 lives per year, since 9/11. Narrowing down to just domestic CT spending on government-wide Homeland Security projects shows that spending on just that set of subprograms would have to have prevented the murder of 65,233 people, or 4,077 per year, to break even. From 2002 through 2017, my latest estimate is that 172 total people were murdered on U.S. soil by all terrorists (Islamic, non-Islamic, domestic, U.S.-born, foreign-born, white supremacists, etc.). Thus, all CT spending would have to have saved 1,097 times as many lives as were actually taken by terrorists in attacks on U.S. soil for the costs of CT spending to equal the benefits in terms of lives saved. Focusing on just government-wide Homeland Security CT spending shows that it would have to have saved 379 times as many lives as were actually killed in terrorist attacks on U.S. soil to break even. It is difficult to estimate a counterfactual but it would take a very creative imagination to honestly believe that post‐9/​11 CT spending actually saved that many lives by preventing terrorist attacks.

Methodology

The first step is estimating the value of a statistical human life to compare with the cost of CT spending. This is an emotional and fraught way to measure human life. As a father and a husband, I understand this emotional reaction very well but the fact remains that if the government spends more than the statistical value of life to save a life through enhanced CT, then that means that other people died because of neglected safety in other areas. As a hypothetical example, suppose the value of a statistical life is 15ドル million. If the government spends 30ドル million to save one life by spending on X then that means that one person, at least, died who did not have to if that money was spent where it would save more lives. Thus, spending that amount of money on reducing the risk of X results in more deaths than otherwise would have occurred. Although emotional and hard to calculate, estimating the statistical value of life can help policymakers save more lives. The death of human beings is the largest and most significant cost of terrorism but not the only one as other forms of destruction are also costly but relatively minor compared to death. For the purposes of simplicity, I will focus on the cost in terms of human life.

As I wrote in 2016, the Department of Homeland Security (DHS) produced an initial estimate that valued each life saved from an act of terrorism at 6ドル.5 million, then doubled that value (for unclear reasons) to 13ドル million per life saved. Adjusting for inflation raises that estimate to about 7ドル.5 million. Hahn, Lutter, and Viscusi use data from everyday risk-reduction choices made by the American public to estimate that the value of a statistical life is 15ドル million. I use 15ドル million in this blog post as it is the largest number.

The second step is dividing the value of CT spending by the statistical value of life estimate to see how many lives would have to have been saved for that spending to equal the benefits. I copy this method directly from Chasing Ghostsby John Mueller and Mark Stewart and their other important work on this topic.

The third step is comparing the above results to the number of people who were actually murdered on U.S. soil in terrorist attacks. Using the same methods as this policy analysis and including native-born attackers reveals that there were 172 people murdered in terrorist attacks on U.S. soil from 2002 through 2017. That includes people murdered by terrorists of every ideology including Islamists, white supremacists, environmental extremists, and others regardless of where they were born.

Results

The first column in Table 1 shows that 188,740 lives would have to have been saved by all CT spending for the value of that spending to save an equivalent value in terms of human life. The second column of Table 1 focuses on domestic Homeland Security CT spending, a subset of all CT spending, as it is most directly related to saving lives on U.S. soil. To break even, domestic CT spending on Homeland Security would have to have saved 65,233 lives from 2002 through 2017 to break even (Table 1).

Table 1

Number of Lives Saved for Counterterrorism Spending to Break Even

Source: Author’s calculations.

If you assume that the value of statistical lives saved is equal to the cost of all CT spending, then you must also assume that all CT spending prevented at least 99.9 percent of all deaths that would have occurred in terrorist attacks on U.S. soil after 9/11 that were prevented. If you just focus on domestic Homeland Security spending during that time and assume that the value of statistical lives saved is equal to the cost of CT spending, then you must assume that it prevented at least 99.7 percent of all deaths that would have occurred as a result of terrorist attacks on U.S. soil that were prevented.

To put those numbers in context, about 250,000 Americans were murdered in non-terror homicides during that time. There would have to have been about 1.4 murders in non-terror homicides for each person killed in a terrorist attack on U.S. soil for the cost of all CT spending to equal the value of human life saved in prevented attacks. For only Homeland Security spending, there would have to have been about 2.9 murders in non-terror homicides for each person killed in a terrorist attack on U.S. soil for the cost to break even. Does anyone believe that CT spending saved that many lives?

Other Costs

The new Stimson Center study group report is a marvelous attempt to measure the nearly impossible-to-gauge extent of federal CT spending after 9/11. Although the report is a good estimate of the direct amount of federal spending on CT, it does not represent the full cost. Here are just a few additional costs that would have to be included to estimate such a number:

• State and local government CT spending.
• The lost economic activity that would have occurred without expensive CT regulations.
• The opportunity cost of this spending, including tax cuts or deficit reduction (the report hints at this as it mentions the death toll from opioids).
• The trade and immigration restrictions promulgated after 9/11.
• The American military casualties in the War on Terrorism.
• The foreign casualties in the War on Terrorism.
• The increased numbers of deaths from consumers choosing riskier forms of travel rather than submit to the expensive, burdensome, and annoying demands of the TSA at airports.
• Deaths that could have been prevented by redirecting CT spending toward other safety-enhancing policies.

Conclusion

The new Stimson Center study group report found that the cost of CT spending is gargantuan. The cost of a government program is only one metric necessary to gauge whether it should exist as we must also consider the benefits it produces. The number of lives that would have to have been saved for the cost of CT spending to equal the benefits, whether overall or just on Homeland Security, would have to be outrageously and unreasonably high for this expenditure to make sense. By diverting government resources from other areas that would have boosted safety, even under the most negative conditions where the marginal cost saved is equal to the statistical value of life, assumes that hundreds of thousands of Americans died because of this increased CT spending who otherwise would have lived due to improved safety elsewhere.